Data Facts Lending Solutions Blog

The Taxpayer First Act, a new law passed in July of last year, includes important provisions for lenders regarding the use of IRS tax transcripts, effective December 28th, 2019.

The only thing constant is change. The person who first said that knows what they are talking about, especially in regards to the mortgage lending industry. 

The IRS is requiring a new 4506-T for all tax return verification orders, as well as a change in how to complete Line 5. The March 1st deadline is upon us, and Data Facts is committed to helping our customers minimize the chance of getting an order rejected by the IRS. Follow this 3 step process to be ready for the change. 

Tax season may just be getting started, but tax scammers have been hard at work. In fact, the Federal Trade Commission (FTC) has gotten thousands of complaints about one kind of scammer in particular — IRS imposters. 

Here’s how they work: scammers posing as IRS officials call and say you owe taxes. They threaten to arrest or deport you, revoke your license, or even shut down your business if you don’t pay right away. They may know your Social Security number — or at least the last four digits of it — making you think it really is the IRS calling. They also can rig caller ID to make it look like the call is coming from Washington, DC. 

Currently, Over 80,000 mortgage applications each year have what is considered “HIGH FRAUD RISK” and the cost to lenders and the financial system are estimated to be BILLIONS!! 

Mortgage fraud is defined by the Mortgage Bankers Association as “any misrepresentation to the lender from a mortgage applicant for the purpose of being approved for a mortgage that the applicant would not otherwise qualify in order to obtain property, or simply profit”. It is a crime with severe penalties yet continues to be one of the fastest growing crimes in the US.

Did you know that the number 1 crime in America is Identity Theft?   And the fastest growing sector of Identity theft is, tax return identity theft, with close to 1 million cases of tax return fraud this year alone.  Due to its fast rise, many are calling this type of identity theft an epidemic, and in fact the IRS has listed “false tax return fraud” a TOP PRIORITY, assigning more than 3000 employees to investigate these cases and trained an additional 35,000 in the basics of ID Theft.

Ordering Tax Return Verifications can be a nightmare if you keep getting kickbacks due to inaccurate information when you order.  Don’t let mistakes slow you down.  Save time and money by making sure you fill out the 4506-T form accurately.  Here are some helpful hints when ordering your TRV.